A View from Brussels

No single market ‘à la carte’ – Evanna Fruithof reports the mood in Brussels in the aftermath of the Brexit vote

A visiting professor of EU law I know (non-UK) used to enjoy asking his students to list the six UK opt-outs from the EU.

On Friday 24 June 2016, he was handed a seventh, the mother of them all.

On the morning after the referendum, a group of British stakeholders met in Brussels. All had hoped to be debating strategy on how to mend fences, build bridges, and get the UK’s relationship, and the EU itself, back on track, following several years of battering. Instead, we were left facing a very uncertain future for all concerned – a lot of immediate questions, and no obvious answers.

Watching from afar, the UK’s domestic political scene disintegrated almost comically in the days following the referendum. With the rise in reported incidents of xenophobia and financial market turmoil, Brussels is left wondering what has been unleashed. Many here feel that the vote for the most part was not about the UK’s membership of the EU per se, but more of a protest vote – expressing dissatisfaction with the political system, the increasing differential between the haves and have nots, and a desire to be heard – all factors at play in other national referenda on, albeit less seismic, EU matters in recent years. The British populist press has come in for a good deal of criticism, as have politicians for failing to stand up to its drip-drip negativity about matters EU over many years. Indeed, politicians of all persuasion, and from most member states, have themselves used Brussels and the EU as a scapegoat when news is bad. The UK has become the most obvious example of how such entrenched duplicity can come back to haunt you.

Next steps?

Initial calls from Brussels and beyond were for the UK to trigger the formal Art 50 Treaty on European Union (TEU) ‘divorce’ process quickly. Time has allowed a more measured approach, and an acceptance that, at the very least, the question of who leads Her Majesty’s Government (HMG) through that process, should be resolved first. At the time of writing, a formal notification by the UK sometime in the autumn is anticipated, and no negotiations will take place beforehand.

What of the other 27 member states? Reporting to the European parliament following the EU summit on 29 June (the first without the UK at the table), Council President Donald Tusk stressed: ‘Access to the single market means acceptance of all four freedoms, including the freedom of movement. We will not sell off our freedoms and there will be no single market “à la carte”.’ He went on to remind us: ‘For decades Europe has brought hope and… we have a responsibility to return to that.’

The ‘EU 27’ plans to meet informally again in mid-September, and no doubt soon thereafter. We can anticipate a reasonably clear and firm position will have been agreed among the EU 27 ahead of the UK’s formal withdrawal notice.

Issues on the table?

The complexity of the task of unravelling the UK’s law from the EU, as well as the myriad other ties, is only just being widely understood. I refer you to the Bar Council’s three-part EU referendum paper for an overview of the types of legal issues involved. Whilst the paper was developed in anticipation of the referendum, it was also intended to provide useful advice and insight into the issues arising afterwards, regardless of the result.

Immediate questions posed for the legal profession include: (i) freedom to provide legal services – preserving the right to practise EU law and rights of audience in the Luxembourg courts, for UK-based practioners; (ii) the protection of acquired rights – for UK citizens living elsewhere in the EU as for EU citizens living in the UK (within that, preserving the right to practise, and rights of audience in the Luxembourg courts, for UK-qualified practitioners, based elsewhere); and (iii) the implications of Brexit for the UK as a jurisdiction of choice, and for English law as the law of choice.

There are elements of quid pro quo – other member states will want to preserve their equivalent rights, although some are already lobbying to get their own, as well as UK, financial services professionals to relocate to Frankfurt, Paris or Milan.

What it will take to trigger Art 50 is still being debated domestically. Even Art 50 itself is open to interpretation. Some experts consider that it covers both the terms of the ‘divorce’ and those of the UK’s ongoing relationship with the EU. Others, only the divorce. The UK is not a party to the internal EU Art 50 discussions, only the EU 27, so this initial legal hurdle is significant. Plus, there is a two-year limit on the Art 50 process, extendable only with the agreement of all member states. The challenge is all the greater due to the sheer volume and complexity of the issues. Simply finding enough competent officials to handle the negotiations for the UK will be a task in itself.

Change of direction?

There has been much debate about a second referendum, a general election leading to a pro-remain government, UK parliament reticence to trigger the Art 50 process, etc. As lobbying by UK professional bodies, industry, financial services (passporting anyone?), trade union and other representative organisations (consumer, human rights, crime fighting) reveals their UK-EU relationship wish lists, it is not inconceivable that HMG and its lead negotiators will come to realise that, in practice, the UK can only satisfy all by remaining in. We are after all, warned that ‘there will be no single market “à la carte’’’.

If remaining in is not, then, an option, there could be stiff competition between domestic stakeholders regarding whose wish list is respected. For example, most of the potential post-Brexit options for the ongoing UK-EU relationship would not provide for free movement of services, at least not without the UK accepting free movement of EU citizens on its territory. For UK lawyers wishing to retain their EU free movement rights, sensitively seeking to secure those through other member states may emerge as the best option.

A further note of caution

Whilst most official reaction to the Brexit vote here has been, to use the Commission’s terminology, ‘regret’ (for the outcome), ‘respect’ (for the democratic process) and ‘resolve’ (as to future EU action), the first of these is by no means universal. The UK’s longstanding ambivalence towards the EU is well documented. Much of the 17 years I have represented the Bar in Brussels has been spent explaining the UK’s use of the Protocol 21 TFEU opt-in in the field of judicial cooperation in civil and criminal matters. Also the 2012-4 Balance of Competences review, which, though valuable, was conducted in such a unilateral manner, with its pro-EU results largely buried, that it was widely seen as driven by domestic Euroscepticism. The Protocol 36 Opt-out of the pre-Lisbon Treaty criminal justice measures was also seen here as a politically driven exercise, of little substantive worth, though it absorbed a lot of energies in Brussels as well as in London. We also have the UK’s non-participation in the Euro, in Schengen, etc. Many feel that when the dust settles, the EU may have a freer hand to steer a positive future course, without the UK constantly pulling back.

Galvanising the EU

Indeed, the UK referendum may usher in opportunity for the EU. It has already prompted a much-needed period of reflection and greater self-awareness, both in Brussels and other member states. Inevitably, opinions diverge on how to develop a vision for the future of the EU with which the remaining member states, and their populations, will engage. Some seek new institutional reforms, new Treaty renegotiations, all likely moving towards an integrated Europe. Others consider ‘doing less and doing it better’, as exemplified in the ten guiding political priorities of the Juncker Commission, should be embraced across the EU institutions. Advocates of that approach believe that implementing these priorities would address the political, economic, social and security needs and expectations for a better Europe. Either way, if a revitalised EU emerges from the present turmoil, that would be a positive result for all.

Evanna practised at the Bar in London until 1990, then spent two years with the European Commission. She worked at Freshfields and as deputy director of an EU thinktank. She established the Bar Council’s Brussels Representation in 1999 and has served as its consultant director ever since. She is a Bencher of Middle Temple.

A View from Brussels

On Friday 24 June 2016, he was handed a seventh, the mother of them all.

On the morning after the referendum, a group of British stakeholders met in Brussels. All had hoped to be debating strategy on how to mend fences, build bridges, and get the UK’s relationship, and the EU itself, back on track, following several years of battering. Instead, we were left facing a very uncertain future for all concerned – a lot of immediate questions, and no obvious answers.

Watching from afar, the UK’s domestic political scene disintegrated almost comically in the days following the referendum. With the rise in reported incidents of xenophobia and financial market turmoil, Brussels is left wondering what has been unleashed. Many here feel that the vote for the most part was not about the UK’s membership of the EU per se, but more of a protest vote – expressing dissatisfaction with the political system, the increasing differential between the haves and have nots, and a desire to be heard – all factors at play in other national referenda on, albeit less seismic, EU matters in recent years. The British populist press has come in for a good deal of criticism, as have politicians for failing to stand up to its drip-drip negativity about matters EU over many years. Indeed, politicians of all persuasion, and from most member states, have themselves used Brussels and the EU as a scapegoat when news is bad. The UK has become the most obvious example of how such entrenched duplicity can come back to haunt you.

Next steps?

Initial calls from Brussels and beyond were for the UK to trigger the formal Art 50 Treaty on European Union (TEU) ‘divorce’ process quickly. Time has allowed a more measured approach, and an acceptance that, at the very least, the question of who leads Her Majesty’s Government (HMG) through that process, should be resolved first. At the time of writing, a formal notification by the UK sometime in the autumn is anticipated, and no negotiations will take place beforehand.

What of the other 27 member states? Reporting to the European parliament following the EU summit on 29 June (the first without the UK at the table), Council President Donald Tusk stressed: ‘Access to the single market means acceptance of all four freedoms, including the freedom of movement. We will not sell off our freedoms and there will be no single market “à la carte”.’ He went on to remind us: ‘For decades Europe has brought hope and… we have a responsibility to return to that.’

The ‘EU 27’ plans to meet informally again in mid-September, and no doubt soon thereafter. We can anticipate a reasonably clear and firm position will have been agreed among the EU 27 ahead of the UK’s formal withdrawal notice.

Issues on the table?

The complexity of the task of unravelling the UK’s law from the EU, as well as the myriad other ties, is only just being widely understood. I refer you to the Bar Council’s three-part EU referendum paper for an overview of the types of legal issues involved. Whilst the paper was developed in anticipation of the referendum, it was also intended to provide useful advice and insight into the issues arising afterwards, regardless of the result.

Immediate questions posed for the legal profession include: (i) freedom to provide legal services – preserving the right to practise EU law and rights of audience in the Luxembourg courts, for UK-based practioners; (ii) the protection of acquired rights – for UK citizens living elsewhere in the EU as for EU citizens living in the UK (within that, preserving the right to practise, and rights of audience in the Luxembourg courts, for UK-qualified practitioners, based elsewhere); and (iii) the implications of Brexit for the UK as a jurisdiction of choice, and for English law as the law of choice.

There are elements of quid pro quo – other member states will want to preserve their equivalent rights, although some are already lobbying to get their own, as well as UK, financial services professionals to relocate to Frankfurt, Paris or Milan.

What it will take to trigger Art 50 is still being debated domestically. Even Art 50 itself is open to interpretation. Some experts consider that it covers both the terms of the ‘divorce’ and those of the UK’s ongoing relationship with the EU. Others, only the divorce. The UK is not a party to the internal EU Art 50 discussions, only the EU 27, so this initial legal hurdle is significant. Plus, there is a two-year limit on the Art 50 process, extendable only with the agreement of all member states. The challenge is all the greater due to the sheer volume and complexity of the issues. Simply finding enough competent officials to handle the negotiations for the UK will be a task in itself.

Change of direction?

There has been much debate about a second referendum, a general election leading to a pro-remain government, UK parliament reticence to trigger the Art 50 process, etc. As lobbying by UK professional bodies, industry, financial services (passporting anyone?), trade union and other representative organisations (consumer, human rights, crime fighting) reveals their UK-EU relationship wish lists, it is not inconceivable that HMG and its lead negotiators will come to realise that, in practice, the UK can only satisfy all by remaining in. We are after all, warned that ‘there will be no single market “à la carte’’’.

If remaining in is not, then, an option, there could be stiff competition between domestic stakeholders regarding whose wish list is respected. For example, most of the potential post-Brexit options for the ongoing UK-EU relationship would not provide for free movement of services, at least not without the UK accepting free movement of EU citizens on its territory. For UK lawyers wishing to retain their EU free movement rights, sensitively seeking to secure those through other member states may emerge as the best option.

A further note of caution

Whilst most official reaction to the Brexit vote here has been, to use the Commission’s terminology, ‘regret’ (for the outcome), ‘respect’ (for the democratic process) and ‘resolve’ (as to future EU action), the first of these is by no means universal. The UK’s longstanding ambivalence towards the EU is well documented. Much of the 17 years I have represented the Bar in Brussels has been spent explaining the UK’s use of the Protocol 21 TFEU opt-in in the field of judicial cooperation in civil and criminal matters. Also the 2012-4 Balance of Competences review, which, though valuable, was conducted in such a unilateral manner, with its pro-EU results largely buried, that it was widely seen as driven by domestic Euroscepticism. The Protocol 36 Opt-out of the pre-Lisbon Treaty criminal justice measures was also seen here as a politically driven exercise, of little substantive worth, though it absorbed a lot of energies in Brussels as well as in London. We also have the UK’s non-participation in the Euro, in Schengen, etc. Many feel that when the dust settles, the EU may have a freer hand to steer a positive future course, without the UK constantly pulling back.

Galvanising the EU

Indeed, the UK referendum may usher in opportunity for the EU. It has already prompted a much-needed period of reflection and greater self-awareness, both in Brussels and other member states. Inevitably, opinions diverge on how to develop a vision for the future of the EU with which the remaining member states, and their populations, will engage. Some seek new institutional reforms, new Treaty renegotiations, all likely moving towards an integrated Europe. Others consider ‘doing less and doing it better’, as exemplified in the ten guiding political priorities of the Juncker Commission, should be embraced across the EU institutions. Advocates of that approach believe that implementing these priorities would address the political, economic, social and security needs and expectations for a better Europe. Either way, if a revitalised EU emerges from the present turmoil, that would be a positive result for all.